By Susan Shain
Canada and the U.S. We’re so close, and so similar; it seems like moving between the two would be no big deal.
But, it’s far more complicated than it looks.
In addition to work visas and tax burdens, there’s also the question of credit scores. Namely, when you come to the U.S., you might wonder: Does my credit score transfer from Canada?
Here’s what you need to know. ...
Like many things between our two great nations, credit scores between the U.S. and Canada are pretty similar, with just a few differences.
According to Canada’s Office of Consumer Affairs, Canadians use a scale between 300 and 900, based on reporting from two credit bureaus: Transunion and Equifax.
Here in the U.S., our scale goes from 300 to 850, and includes reporting from one additional bureau: Experian.
As for what goes into the credit score, it’s essentially the same in both countries: payment history, amount owed, length of credit history, new credit applications, and types of credit used.
On individual reports, Canada also uses a credit rating system that we don’t have in the U.S.
Now you know our credit scores are calculated similarly … but the bigger question still stands: Will your credit score transfer from Canada?
Unfortunately, the answer is no.
Experian offers a detailed explanation why not, citing the following reasons:
Legal issues: Some countries have laws that prohibit the transfer of information across borders, and “a Canadian company could find it very difficult, if not impossible, to meet the U.S. Fair Credit Reporting Act requirements.”
Credit reporting: As you saw above, our credit reports are quite similar -- but not identical. “Information included in credit reports in one country may not be included in the one to which you move,” explains Experian.
Technological differences: “The software and systems used to collect and maintain credit history information may simply not be compatible.”
So your Canadian credit score won’t transfer to the U.S., does it matter? And if it does, what should you do?
As you’ll soon discover, it does matter. Credit scores are incredibly important here in the States: They’ll help you do everything from land a job to get utilities in your new apartment.
That’s what Kari, a Credit Sesame staffer, who moved from Vancouver to the U.S., quickly discovered.
So, what did she do to establish credit? She got a social security number, opened a bank account and used a Canadian-affiliated bank to get an American credit card.
A great start, right?
The only other thing we’d advise her to consider is a credit-builder loan (like the ones we offer here at Self!). They’re a great way to quickly and securely build up your American credit.
Though you might be disappointed to learn your credit score doesn’t transfer from Canada to the U.S., you're not alone. The U.K. credit score doesn't transfer to the U.S. either.
Susan Shain has written extensively about personal finance for Student Loan Hero, The Penny Hoarder and other publications. Her work has also appeared in The New York Times and MarketWatch.